Understanding ITR 2025: Sahaj or Sugam — Which Income Tax Form is Right for You?

As the deadline for filing Income Tax Returns (ITR) approaches, taxpayers must identify which filing form is applicable to their individual financial situations. This year, the Income Tax Department has extended the deadline for ITR submissions by 45 days until September 15, 2025, allowing more time for taxpayers to ensure their forms are accurately completed.

The Central Board of Direct Taxes (CBDT) has also made Excel utilities available for the ITR-1 (Sahaj) and ITR-4 (Sugam) forms, simplifying the process for many. Here, we break down these forms and help you determine which one best suits your income sources.

Overview of Income Tax Forms

ITR-1 (Sahaj)

ITR-1, commonly referred to as Sahaj, is specifically designed for individual taxpayers whose total annual income does not exceed ₹50 lakhs. Registrants eligible to use this form must derive their income from:

• Salary
• One house property
• Family pension
• Agricultural income (up to ₹5,000)
• Other sources, including:
  • Interest from savings accounts
  • Interest from fixed deposits (bank, post office, or cooperative society)
  • Interest on tax refunds
  • Family pensions

Sahaj is a straightforward option for salaried individuals and those with minimal additional income streams.

ITR-2

This form is applicable to individual taxpayers and Hindu Undivided Families (HUFs) who don’t qualify for ITR-1. Taxpayers must not have any business or professional income for eligibility. This form is suitable for those with income from:

• Salary
• House property
• Capital gains
• Other income categories not associated with business activities.

ITR-3

ITR-3 is intended for taxpayers who engage in business or professional activities and are therefore obligated to maintain formal financial records. If you do not earn income from business or profession, this form is not suitable.

ITR-4 (Sugam)

Also known as Sugam, ITR-4 is for residents, including individuals, HUFs, and firms (excluding limited liability partnerships), with income not exceeding ₹50 lakhs. This form is appropriate for those who derive income from:

• Presumptive business scenarios under sections 44AD, 44ADA, or 44AE
• Salary or pension
• One house property
• Agricultural income (up to ₹5,000)
• Various interest incomes, such as from savings accounts and deposits.

Sugam offers a simpler filing option for small businesses and professionals with a relatively uncomplicated financial profile.

Choosing the Right ITR Form

Choosing the correct ITR form is essential for compliance and ensuring that taxpayers benefit from any applicable deductions and exemptions. Taxpayers must evaluate their income sources and total income to determine the appropriate form.

With the recent deadline extension and the availability of Excel utilities, taxpayers are encouraged to take their time to fill out their ITR forms accurately. If you’re uncertain which form applies to your case, it may be beneficial to consult with a tax professional.

Stay tuned for more updates on personal finance and ensure that your tax filing obligations are met by the revised deadline.

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